back in ten minutes. to members of the public, given we have a small window or break, if you haven't filled out a yellow speaker card, please come up and fill out your name. the cards are over here. we will be calling speakers for public comment with the speaker cards. thank you very much. we will recess and be back in ten minutes.

hello, welcome back to the regular budget and finance. we came back from recess. i'm carmen chu, joined by supervisor avalos, vice chair. supervisor kim will join us shortly. i'm joined by supervisor campos and ferl. will you read item 6 and 7. >> 6, resolution authorizing public daily

use commission subject to daily use to lawn tfp clean power sf, approving local assisting services for clean power sf customers and authorize general manager of the public utilities commission to execute a contract with shell energy for four years and six months to launch the clean power sf. it item 7, appropriating 19, 500,000 of hetch hetchy fund balance at public utilitis to support the clean aggregation program regarding the authorization to the san francisco puc and board of supervisors and adding code 10.10037 2 and 3373 to establish clean power sf fund and clean power reserve fund. * >> thank you very much. colleagues, we have these two items before us.

i think these two probably have traveled a long road before coming to us here at the budget and finance committee. we have a number of speakers here today. of course we have ed harrington and his staff from the puc. we will hear from the puc, then office of economic analysis and then our budget analyst report. before we do that i will ask my colleagues if anybody would like to make any opening comments. supervisor campos? >> thank you very much, madam chair. thank you members of the budget committee. my apologies to you and members of the public for being late. i appreciate the brief recess. supervisor wiener and i have been coming back from the metropolitan transportation commission, where we ready the city and county of san francisco. first in terms -- there are

some amendments to the resolution that is before you authorizing the puc to launch the clean power program. i have copies of those amendments and respectfully request the budget committee at some point make the amendments along the lines that are detailed in the document. i have the clerk -- i think you have them. make sure you have a copy and we have copies available to the public, if people would like them. let me begin by saying that this has been a long time coming. community choice aggregation is something that the san francisco public utilities commission and local agency commission have been working on since 2004. i would like to begin the presentation today by taking the time to acknowledge the amazing

work done over the years by the san francisco public utilities commission. in particular, i want to highlight and recognize the work of the general manager, ed harrington, who is here and presenting shortly. he and his staff have worked i don't know how many hours over the last few years to make this happen. i want to thank them for the professionism. the expertise, dedication and integrity that they have brought to this process. it is greatly appreciated. my hope is this will be successful. i think this will be one of the many legacies that ed will leave the city and county of san francisco. it's been an honor, mr. harrington. i want to acknowledge lafco, a separate government agency. over the years lafco has had many members of this board and members of the community that have worked on this item. all of them have

contributed over the years to make this product what it is today. i also want to acknowledge the work of the amazing lafco staff. we have our executive officer, nancy miller, as well as jason freed, who have put in many hours and have done a tremendous job moving this item forward. let me be honest about community choice aggregation and specifically the program that is before you. i don't believe that this program will answer all the world's problems but i also don't believe it will create them. i think it is important for us as we hear this item, hear some of the public comment that's about to take place that we put things in context. we as a board have taken a position in the last few years. in 2007 we outlined -- we passed an ordinance that set out some really

ambitious objectives with respect to community choice aggregation. puc and lafco have worked diligently to meet those objectives as much as possible but we have learned certain lessons. one is the ambitious objectives first set out by the board meetings were not attainable. the program that is before you is a program i believe, and as you will see by the presentation and puc, is as good a program as we can put together. this is a phrase used by this board of supervisors before but i believe it is a phrase that aptly fit what is we are trying to do. i hope we don't let the perfect become the enemy of the good. this is not a perfect program. this is not as ambitious as those of us pushing community choice aggregation have wanted it to be. those of us who have talked about cca in the last few years wanted to launch cca

so we not only had a contract before you but at the same time we had a build-out that could be approved at the same time and move forward at the same time. what we have is a program that has evolved in the last few years with the goal of making sure we have community choice aggregation, that we do so in a way that is fiscally responsible and minimizes financial risk to city and county of san francisco. that is why we have approached this in a phase, through phases. phase one the contract and phase two in a fiscally responsible way it is something that will happen once we have a source of income out of phase one so we can then begin the process of doing our own buildout to generate our own energy and contracts like the one before you are no longer needed.

that is the objective, that is the goal. the goal is not only to make this happen. but as you will hear from the puc, you will hear from the department of the environment, the program of ccs is something that is an integral part of what the city is trying to achieve in terms of environmental objectives. i think it is fair to say, certainly my opinion and i think from those who have read the reports i think it is reasonable to see we cannot meet environmental objectives without community choice aggregation. that is why this is so critical. this is why it is so important. the current program has the following components. it is 100% renewable. the program will offer specifically customers a 100% renewable product. it will be at a premium rate. the initial phase was carefully crafted after

extensive market research that found there is a market in san francisco for this kind of product. it would be a program between 20 to 30 megawatts or 50 to 75 residential accounts with an initial contract phase of 4.5 years. i know in the budget and analyst report there is a recommendation to change contract to five years. we are certainly open to that recommendation. yes, shell energy is the supplier of this contract. i will be the first to say at the very outset that i wish the energy industry was run by different players. i wish the companies that we -- as a city could do business with had a different track record. the reality is that the reason why jurisdictions like ma ren county are doing business with shell is because that is the only

option we have. that is to say, though, that we have to understand that as we look at this contract, the goal of this contract ultimately is to lead to a build-out that no longer requires us to engage in those type contracts. i'm not here to defend the track record of any company but i do believe there is a way we can responsibly do business and protect taxpayers and it does so in a way consistent with values and principles we have as a city. this is an opt-out program. if i had a choice, i don't know that i would do it that way, but at the end of the day the program is set out the way it is because of state law. that is something the puc will be explaining very shortly. so i look forward to a robust discussion. i know there are a number

of issues raised in the last few days. those are issues we have thought about. we care about the impact of this program on low income communities. someone who represents district nine with many low income residents. i'm mindful of the importance of protecting those communities. i guarantee we have done and will do everything we can to make sure the interest of those communities are taken into consideration and we go as far as we can possibly go legally and financially to make that happen. i know i have a commitment and the puc has that commitment. i also believe some of the reports that have been presented on this, including the economist, which is very informative. i appreciate the work they did around that program -- around this program. i think that report has also -- should be put in the context that we at this

point don't really know the full benefits of a buildout. i think it is important for us as a policy body to think about that as we try to figure out what some of the costs would be. so with that i will open it up to the public utilities commission. again, i look forward to a robust conversation. the goal is for us to make sure we offer rate payers in san francisco an option. it is about choice. i think at the end of the day there is a way to provide that choice in a way that is fiscally responsible. the last pointly make is just yesterday mayor lee announced october will be the month of innovation in san francisco. we have an opportunity to city government to be a part of that. i think this is an innovative way of us offering choices to our consumers and do so in a way that protects the liability of the city.

with that, mr. harrington. >> supervisor campos, do you want to briefly explain the substance of the amendments? >> yes, thank you. >> we will take that up after public comment. just make sure we are aware of what they are. >> one of the key changes is it makes it clear that it delegates the authority to the general manager of the puc to make any non-material amendments that may be required, technical amendments that may be required to finalize the contract. the language basically is added to strengthen to the extent it is legally possible the commitment to a long-term build-out. we believed that the initial language did that, but to the extent that ceqa and other laws allow us to

strengten that language, that is the intent of many of the changes. they are not substantive. it is simply a matter of emphasizing the commitment to that intent. i think there may be other minor technical changes recommended or need bid the attorney's office. but the substance of the program remains. we don't believe these are substantive changes. >> thank you. to the city attorney is there anything you would add? >> john gifford, deputy city attorney. these amendments would be non substantive. >> thank you very much. why don't we go to the puc. >> good morning, board members. i'm general manager of sf public utilities commission. thank you for your opening comments, supervisor campos. i will try not to repeat those, in the interest of efficiency. with me is barbara hale, in

charge of our power, todd is in charge of finance and mike campbell has been in charge of the community program for a while. as a note mike campbell will leave us to go to work for the california puc as a manager in the rate payer advocacy in the future but they are here to answer questions. i thought i would cover most points and make it easier but if you have detailed questions, we are available to answer those. the presentation today, first start with the big picture, obviously. we don't just do this because we think it is a fun idea. we do it because there is climate change, there are things happening and san francisco has to respond to that. this is the single biggest program on the horizon with the city and county of san francisco to make any difference toward any of the goals toward the greenhouse gasses and climate change in san francisco. without this program you have very little sitting out there. this can make a dramatic

change and provides the city to offer a choice. i'm sure some in the audience, including myself, got a robo-call that talked about the board forcing people into something. after this discussion i will be very clear the board is not forcing anyone to do anything. this is a choice we are making available to our citizens and residents in san francisco. many residents in the city are renters with low usage. i'm a renter in san francisco. i am not going to put a solar system on the roof of my landlord's property. for a small amount of money i can go out and change to get my electricity as a totally greenway of doing business. it makes a change in my life and the world. options but that.n't have the program would start with 95,000 people. the long-term goal is reach everyone. that is what state law says. at some point all residential customers have to have the opportunity to be in this program.

as supervisor campos said, the long-term look at this is really simple. if you look at our water system the reason it works so well for everybody in san francisco is we own our assets. we can control our costs and figure out how we will maintain those assets. the problem in the power system is we don't own it accept for hetchy. we have to start slow, get a revenue base. once we get that, it is possible then to start doing a real control of assets of generating green power. what we can do is this will leverage our ability to create energy future for the city and local jobs. we have been working with lafco, outside consultants to jump start how we can do that local generation, create the jobs, make renewable programs and make a difference. the appropriation before you puts about $6 million into doing energy efficiency, doing solar and starting to prepare for those programs to create our own energy. the cca allows communitis

to provide electric generation for customers within the territory, that is the idea. all we do is provide the generation. we do not take over and do anything else that pg&e does. if you have called and want new service, pge will handle that. if lights go out, if anything happens in your home, peg will come out. they are in charge of distribution systems in san francisco and the bill that will come from pg and e. the one thing we do is provide clean power and see a change on one or two lines that will talk about the difference in rates we will charge. this is not taking over pg&e and not doing anything that would hurt in any way any jobs of pg&e persons in san francisco. they will still work doing the same things they do today. there's been discussion of opt-out services. in fact, people will have plenty of opportunity to opt out. at least two before we start the program with them. l